Glossary of Terms - P

Partnership: Way in which unmarried individuals can take title to a property. Can include domestic partners or business partners. It's recommended that a real estate lawyer first draw up a written partnership agreement before the purchase.

Periodic Cap: Limits the amount that the interest rate of an Adjustable Rate Mortgage can change in one adjustment period.

Planned Unit Development (PUD): A zoning designation for property developed at the same or slightly greater overall density than conventional developments, sometimes with improvements clustered between open, common areas.

Point: An amount equal to one percent of the principal amount of the investment or note. The lender assesses loan discount points at closing to increase the yield on the mortgage to a position competitive with other types of investments.

Pre-Payment Penalty: A fee charged to a mortgagor who pays a loan before it is due. Not allowed for FHA or VA loans.

Prime rate: The interest that banks charge to their preferred customers.

Principal: The amount borrowed or remaining unpaid.

Private Mortgage Insurance (PMI): Insurance written by private companies protecting the lender against loss if the borrower defaults on the mortgage.

Probate sale: Sale of a home after a homeowner dies and the property is to be divided among inheritors or sold to pay debts. The executor of the estate organizes the sale, and a probate court judge oversees the process. The highest bidder receives the house.

Property Tax: Averages between 1 and 2 percent of a home's value but may vary by county.

Prorations: Items that must be prorated between you and the seller at the close of escrow. Can include Homeowner's dues, property taxes and other expenses. Generally, you will be responsible for paying a percentage of these taxes and fees beginning on the day you take title.

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